GREAVESCOT.NS WACC - Weighted Average Cost of Capital

The WACC of Greaves Cotton Ltd (GREAVESCOT.NS) is 17.6%.

The Cost of Equity of Greaves Cotton Ltd (GREAVESCOT.NS) is 17.75%.

The Cost of Debt of Greaves Cotton Ltd (GREAVESCOT.NS) is 11.15%.

	Range	Selected
Cost of equity	16.30% - 19.20%	17.75%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	7.90% - 14.40%	11.15%
WACC	16.1% - 19.0%	17.6%

WACC

GREAVESCOT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.14	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.30%	19.20%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.90%	14.40%

After-tax WACC	16.1%	19.0%


Selected WACC	17.6%

GREAVESCOT.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for GREAVESCOT.NS:

cost_of_equity (17.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.14) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.